I have finished a first read of this paper from
Tullett Prebon Group Ltd a London based company. The paper is a study mainly based on UK and US
information. I would not expect you to read it all but different parts will be of direct interest.
It is on their home page.

www.tullettprebon.com

summary
part one: The end of an era 5
the four factors which are bringing down the curtain on growth
The economy as we know it is facing a lethal confluence of four critical factors – the fall-out
from the biggest debt bubble in history; a disastrous experiment with globalisation; the
massaging of data to the point where economic trends are obscured; and, most important of
all, the approach of an energy-returns cliff-edge.

part two: This time is different 17
the implosion of the credit super-cycle
The 2008 crash resulted from the bursting of the biggest bubble in financial history, a ‘credit
super-cycle’ that spanned three decades. Why did this happen?

part three: The globalisation disaster 29
globalisation and the western economic catastrophe
The Western developed nations are particularly exposed to the adverse trends explored in this
report, because globalisation has created a lethal divergence between burgeoning consumption
and eroding production, with out-of-control debt used to bridge this widening chasm.

part four: Loaded dice 43
how policies have been blind-sided by distorted data
The reliable information which policymakers and the public need if effective solutions are to
be found is not available. Economic data (including inflation, growth, GDP and unemployment)
has been subjected to incremental distortion, whilst information about government spending,
deficits and debt is extremely misleading.

part five: The killer equation 59
the decaying growth dynamic
The economy is a surplus energy equation, not a monetary one, and growth in output
(and in the global population) since the Industrial Revolution has resulted from the
harnessing of ever-greater quantities of energy. But the critical relationship between
energy production and the energy cost of extraction is now deteriorating so rapidly that
the economy as we have known it for more than two centuries is beginning to unravel.

Ho hum, so what. Your assumption that government can manage the economy is still wrong.

"If only we had the right data sets, *then* we could manage the economy".

Wrong.

Dear Bazz,

We have to realise that
we cannot return to the old days of "reckless
plenty." We have to change our life-styles
if we are to cope in the future.

Doomsayers have been around for decades, however
they are now becoming more mainstream -
with good reason.

Humans are very bad preparing for change. But they're
very good at adapting to it when it arrives.

I agree with much of what Dr Morgan states. He points
out that too much debt, too little
cash flows and not enough growth is problematic.
That debts are unsupportable without sustained economic
growth. This he's based on the conditions in the UK
and the US and warns other developed countries.

Fair enough. He talks about the energy crisis that we
are all facing and how the planet has a finite
amount of resources. Thus if world population
continues to grow rapidly, if industrialism spreads
around the world, and if pollution and resource
depletion continues at an increasing rate, human
society is in trouble. One way or another sweeping
social changes await us.

But there is hope. Dr Morgan hasn't made any allowances for
the ability of technology to transform the way energy is
consumed and supplied. Our government has to set out
policies to ensure a strong economy, and support jobs
and growth. A plan to boost skills and innovation so we
can succeed in the Asian Century.

As a political commentator pointed out:

"The Prime Minister announced a policy of $1 billion
jobs plan recently which was a solid policy aimed at
improving Australia's patchy record in home grown
manufacturing and the commercialisation of innovation."

"The policy included a welcome re-allocation of
Research and Development funding away from giant mining
corporations. A policy recommended by the Business Tax
Advisory Group towards small and medium enterprises, as
well as an extra $500 million of investment in so called
"innovation precincts." In addition there was #350 million
in new funding for venture capital, through the
Innovation Investment Fund."

This is a step in the right direction.

Jardine, I think you misinterpreted what the article says.
It is not a prescription for fixing the problem.
It is a description of the causes of the problem.

There is a distinct possibility that it is not fixable.

Lexi, glad that you read the article. My previous concern on our
economy was quite narrowly focused, in that I could see how lowering
availability of energy was going to get us into big trouble sooner or later.
I had not realised how fragile the finance & economy are even before
the energy crunch arrived.
It makes me more pessimistic, because the effect will be so much worse
and we will not have the resources to adapt and have a reasonable
living standard.

Everything will depend on how much shale oil can be made available
to stretch the time governments will have to act to let us down gently.
Unfortunately shale oils decline rates makes them a financial black
hole and governments may have to subsidise them.

Dear Bazz,

I understand your concern.

Indeed, I remember
reading about the rises in the price of oil in the early
1970s - when gasoline was 38 cents a gallon at American
pumps - shocked the world economy. In the inflation and
and slump that followed, some 45 million workers in the
industrialised countries lost their jobs. Thanks largely
to energy conservation, there was an oil glut, and
prices though higher, became stable for the time being.
But oil is a non-renewable resource which will inevitably
be exhausted one day.

Given the interrelationship among technology, ecology,
and resources, can global industrialisation continue
indefinitely? Some writers, such as Dr Tim Morgan
glumly forsee a new era of scarcity, in which economic
growth would be replaced, by economic shrinkage.

Others, are highly optimistic that we will cope relying on
technological innovations to solve problems in the future
as we have in the past.

But predicting the future is a
risky matter at the best of times, and to project
trends for many decades into the future, when one cannot
be aware of subsequent technological and other factors
that might affect them, is not a very reliable way of making
forecasts.

For example if data on agricultural production a century
ago had been used to project trends into the future,
they would have pointed to a global mass starvation at this
moment. But the "green revolution" (the introduction of new
hybrid species of high-yield grain) and highly mechanized
agricultural techniques have greatly increased food
production in a way that could not have been anticipated.

Harold Macmillan summed it up beautifully:

"Events dear boy have a way of making idiots of us all."

Lexi,
The spike in oil prices in the 70s was of course different to what we are now facing.
At that time the causes of shortage were political when Saudi Arabia &
others banned the sale of oil to the US because of the war with Israel.
Supply was restored after the war.
What we are facing here is a physical decline in production.
quote;
in which economic growth would be replaced, by economic shrinkage.

I suggest that you read "The End of Growth" by Richard Heinberg.
As well, alternatively "Your World is About to Get a Whole Lot Smaller" by Jeff Rubin.
Google their talks on Utube.

Your comment on food production points up a problem.
Unless we can electrify farming totally we face the necessity to
increase the number of farmers by around 100 times to feed the present population.
To use electricity on that scale for everything we really have no
alternative to nuclear or geothermal.

With politicians in most countries just actively ignoring the problem
by the time it becomes clear to every man in the street it will be far too late.
I met and spoke to my MHR (Liberal) and exchanged some emails and
information with him, and then asked if he would ask the party to look
at the problem.
You could just about see him shuffling his feet & squirming.

That's where our major problem lies.

Dear Bazz,

Thank You for the book references I shall
certainly try to get a hold of them through
the library. But more than that -
You've raised so many valid issues
and given me much food for thought for which
I'm grateful.

Another resource thatis very much in short
supply is fresh water. Although ours is a watery
planet, most of the water is in the oceans.
The bulk of the fresh water is frozen in icecaps
or hidden underground aquifers, so less than 1 percent
of all the earth's water is available at the surface
for human use- and much of it is in the wrong place.

Yet modern industrial societies require huge amounts
of water for domestic, agricultural, and industrial
purposes. I've read that it takes 120 gallons of water
to put an egg on the breakfast table, 15,000 gallons
to grow a bushel of wheat, and 60,000 gallons to
produce a ton of steel. American society consumes
enormous quantities of water - more than 2,000 gallons
a day per person, which is more than three times as much
as the Japanese use.

Another concern is that all over the world, and especially
in the less developed societies, the pressure of the
human population and its technologies is devastating
natural ecosystems. This pressure takes many forms -
urbanisation and highway construction; transformation of
of virgin land into farmland, chemical pollution of
fresh water, dredging and landfil in coastal areas;
uncontrolled hunting and poaching especially of
African wildlife; deliberate and accidental o=poisoning of
wildlife with pesticides, disruption of natural
predator-prey relationships; strangling of millions of
birds and fish with discarded styrofoam pellets, plastic
bags, and other synthetic flotsam, dam construction and
irrigation; and massive deforestation.

As far as getting politicians to listen to us. We
can't give up. If enough of us continue to join in
the right to have our voices heard and we continue to apply
the pressure - then we just may be able to make changes.
As history has shown us - the collective action of people
can achieve change.

Ahh, yes Lexi, you mention water as a concern.
There is also phosphorous and another few more elements developing shortages.
Heinberg wrote a book called Peak Everything !
Not far wrong either.

Search on the library for James Kunstler. He is a bit way off the
planet but he does think we could live in small towns very comfortably.
He wrote two fiction books, 1st in the series World Made By Hand and
the 2nd in the series The Witch of Hebron.

They are placed after the collapse and the US government is rumoured
to be somewhere in Wyoming.

It was interesting to look at the google view of the towns in the
books in upstate New York where he now lives.

Dear Bazz,

Again Thank You for the book references.
You've given me enough to keep my busy
for quite a few months.

Nice one Bazz,

Unfortunately this all seems like 101 reasons why socialism is failing. Whilst we have been busy strangling western economies and our wealth creators with socialization, it has taken us some time to take notice, now we have noticed and the left doesn’t want to cop it sweet so, look over there, is that a Unicorn?

Spindoc, Not sure it is either caused by socialism or is the death of
socialism.
I think ultimately it will result in a merge of socialism and capitalism.
Industry will be very local and will be small time companies so that
will be the new capitalism, and communities will be very much more
reliant on all the members of that community, the new socialism.

For instance, government funded old age pensions will either be non
existent or will be a pittance.
Unemployment benefits will likewise reduced to near zero.
Most governments have unfunded pension funds, and debts that will not
allow the pensions to be paid. Australia is close to that.

Food production will be very local, except perhaps wheat.
Airline traffic will gradually, hopefully, decrease until only the
very rich or government ministers are travelling by air.

I know that sounds way out, but it is a natural consequence of a
decrease in available energy.
All this of course would be modified if enough nuclear stations were
built to power the economy and transport could all be converted to electricity.
There might be a job for you as a stoker on a coal fired 747 !

Unfortunately some who know have calculated that we have left it too
late as there is not enough credit and capital available to do the job.

Hi Bazz, Yes but!

So eliminate everything before the word “but”.

Your explanation is far too complicated to be true. Your comments embrace a wild and diversified body of “opinion”, far too wide to have any meaning other than a much diluted version of events.

If you want to have an impact, you need to focus upon some key points and then substantiate them. This ever broadening spectrum of “explanations” for everything and anything is just an example of “I have all the questions but no answers”.

Why is it that you have the ability to articulate so much detail but lack the capacity to drive home any point? The best example of your scattered thinking is embodied in your assertion, “I think ultimately it will result in a merge of socialism and capitalism” WTF does that mean?

If you cannot define either socialism or capitalism in relation to the topic then of course you can only draw such a conclusion. What is it, what does it do, what are the effects, what will be the outcomes, what are the benefits and who will be the beneficiaries?

Your diatribe moves further and further away from any form of reality until it is so diluted as to be meaningless. What is it you are trying to say for pities sake? Your post stimulates only those who are driven by emotion, no cognitive skills are ever invoked; only “Yes, I feel the emotion”. You are off with the bloody fairies.

Come on, you can do better than this.

@ Spindoc

LOL! I was going to ask him what he fears the most personally about all this. losing a trip to barli for the holidays perhaps?

I don't think it's anywhere near as bad as he assumes. There are a lot of answers to his unasked questions, too many to really get into on this forum with its limited word count and editing abilities.

Perhaps that's why his post is watered down?

Dear Bazz,

Ignore people who have to stoop to personal insults
in order to hide their ignorance on any given topic.
These Gentlemen if they are really interested in
the topic can always Google the article by Dr Tim
Morgan either under "Perfect Storm," or "Armaggedon."
There are many "simpler" websites explaining the issues
Dr Morgan is dealing with. However, that's probably too hard
for them. Insults are so much easier.

Spindoc said; Come on, you can do better than this.

Well not at this hour of the night.
By socialism, I did not mean the government organised large scale
bureaucratic organisation, I mean a grass root community effort to
help those in need.

By capitalism I meant the local furniture maker, and the man who has
rented out a shop and repairs radios, toasters, and will come around
and fix your TV, if the TV stations have been able to pay their electricity bill.

You said; “I have all the questions but no answers”.
Very true because there are so many unknowns that the questions are
never precise enough so that we have to guess as to how fast and in
what order services either fail completely, or partially.

However we predict it will always be wrong.
Who would have thought that the chairman of the IPCC would admit that
there has been no warming for 17 years ?

Raw Mustard said;
losing a trip to barli for the holidays perhaps?

Maybe, I have not been there yet.
Oh, I can assure you, it will be worse than I have illustrated, but I
probably won't be here to see that.

An increase in fuel prices to very high levels is absolutely certain
over the next ten years. It is mathematically certain.
The only doubt over putting exact figures on it is whether the massive
amount of pixel money will cause Weimar like inflation.
It is the only way the US can get out of debt, or simply say "st^%f U.
Just watch what is happening in the airline industry, and yet people
are still waffling about building a second airport for Sydney !

I forgot to mention this;
There are a number of books on the collapse of empires, eg Rome Persia
etc but there is another by someone called Trantoir or similar and
it deals with the collapse of complex systems & societies.
It seems that simple societies just wind down when their resources
start declining, but complex societies, such as ours collapse very
dramatically and quickly.
Imagine, that tomorrow mornings news the government announced that
there was no diesel fuel available.
The refineries in Singapore could not supply it.

How long before shoppers were fighting in the isles for the last cans of beans.
Three days !

Thats how long it took in the UK.

Sweet Dreams !

Much better Bazz,

You still telegraph your fears for our societies but this demonstrates you have a social conscience. Googling links, papers and reference books are part of understanding the questions; they do not provide the answers, they are your job.

In fact if you have fears or concerns about specific policies and their impact upon us, reading opinions about those potential negatives simply reinforces those fears because you are left to focus upon the symptoms rather than the causes. It’s evident you read a great deal about these things but I also get the feeling that the multiple areas of concern you articulate are all symptoms and not causes.

You made a good start with capitalism vs socialism. Outside of particle physics this is probably one of the most complex, divisive and emotive issues humanity faces. So good luck.

Have a look at it from an economic perspective first. Capitalism is spruiked as wealth creation for those lucky enough to be participants. Socialism presents itself as socially conscious and equitable in the distribution of wealth. The difference between these two ideologies in the industrialized nations is quite narrow, particularly where they meet in politics. Start at the top of the information pyramid where things are tight and focused, rather than lower down where the issues expand exponentially.

Lastly, the Tullett prebon Group publish risk assessment papers for the wholesale markets. They have absolutely no relevance to social political constructs; they produce narratives for investors based upon negatives. Reading such papers is interesting but futile because you are trying to apply their investment assessments to your social fears and conscience.

You’re trying to drink from a fire hose!

Spindoc,
You ask about causes, I have mentioned the oil depletion may
times as a cause, and as you are familiar with that firm, have you
read /home/barry/Documents/Economy/TPSI_009_Perfect_Storm_009.pdf
it is has a number of causes more than I originally had known about.
It is hardly investment advice unless it says, run for the hills and buy five acres,

You misunderstand, you said;
they do not provide the answers, they are your job.
No it is not my job.
I cannot suggest real solutions because they are beyond my powers.
I can only hope that by ringing the bell that someone who has the
power and can see that there is a fire wakes up !
I can see that this is such a massive problem it will need someone
of national or indeed international status to undertake a diversion of
all national aims onto the problem.

When I see how difficult it has been to get unified international
action on climate change I don't see how it can be solved in time.